[Portfolio Showcase Series!] Journey to property #5 – Heading North to Moreton Bay!

Having bought two IPs in Logan, even though I was quite happy with the result I’ve started to think that I will need to look at diversifying in QLD.

My options were to go West or North. If you read my first time encounter with Ipswich, you’ll know that I’m not a big fan of heaps and heaps of land.

That’s why my preference was North and with my budget of around 300K, it essentially brought me to the Moreton Bay area!


Where is Moreton Bay?

Let’s start off with a bit of background about Moreton Bay. For readers who are not familiar with QLD, QLD consists of a number of councils with large coverage area. Moreton Bay Regional Council (MBRC) is one of them and covers over 2037 km squared in QLD and is situated above Brisbane City Council (BCC).

And it’s big…!! Just to give you some idea here are an overview of MBRC coverage with different divisions:
mbrc-map.png

We will focus more towards lower part of Moreton Bay. More specifically, the area around North Lakes – Kallangur and Deception Bay.

Why? Because it suits the budget range I have, and yield is quite decent from QLD North’s aspect. Deception Bay is closer to water, while Kallangur has the new train line going in – each have its own uniqueness.

Starting from Deception Bay…

Initially I started looking around Deception Bay, because it has the coastal factor which is a scarcity. Back in 2015 when I was looking Deception Bay had a median price of about 250K – very affordable entry price, close enough to the Redcliffe peninsula and about 32km from CBD!

With the excellent yield I’ve achieved in the Logan area, I’ve held similar expectation and started my search…Only to find that yield up in North is not as good as the southern counterparts. Even the typical highsets I was targeting at are not renting the same as the southern Logan areas. At Deception Bay, I would be lucky to find anything over 6% yield, let alone the 7% type of beasts!

Nevertheless I still felt the need to diversify a little and for me, I love to explore new areas! So I’ve done my homework on realestate.com.au and shortlisted a couple of properties, picked a weekend and flew up to Deception Bay just to check out the area and attending open for inspections!

Having attended the low socio-economic area in Logan Deception Bay is actually not too shabby! I’ve spent some time watching the demographics coming in and out of the shopping centre and not feeling intimidated. I mean, occasionally there are still a couple of “bogans” walking past but in general seems to be OK.

Deception Bay has a number of Housing Commissions and at that time government seems to be offloading them in batches. This was one of them which I attended – 28 Fredan Rd, Deception Bay:
DBay OFI.jpg

Advertising for $245K and would rent around $300/week – that’s about 6.4% yield!! So I was quite keen, except because it was government selling they had to wait till all offers are in and pick the highest one instead of first in first serve…so it was a painful process as it’s essentially like a blind auction! You put in what you “think” is the highest price you’re willing to pay, and then once submitted all you can do is pray…

Guess how much it sold in the end! $261K! And currently rented at $300/week, which is 6%. Not too bad for North!



A little trip to the vibrant Redcliffe!

As Deception Bay is very close to Redcliffe and I’ve heard some very positive things about Redcliffe so I thought I’ll use this opportunity to also visit Redcliffe.

What can I say? It’s a really vibrant area – full of trendy cafe on the street and a really nice beach area for kids and families. It reminds me of the Bondi and Manly in Sydney except much less people! So if you do get the chance to visit Moreton Bay, swing by Redcliffe for a nice coffee and enjoy the breeze in a cozy afternoon 🙂

Redcliffe also have the famous Bee Gee’s statues here – a place that Bee Gee fans simply cannot miss!!
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Zooming in on Kallangur deals and search criteria

Moving on from Redcliffe which unfortunately is slightly beyond my current budget and yield is not as great, I’ve came around to the Kallangur area.

Why did I chose Kallangur? A couple of reasons:
1. Kallangur’s median price was around $300K – relatively affordable with average rent around $330-$350
2. New Moreton Bay Train Line is about to be completed (I visited back in Jan 2016, so about 6 months away till the train line is in operation) – capitalize on government’s public transport spend
3. A major shopping hub – North Lakes – is the neighbouring suburb and contains Westfield shopping centre, Costco, Bunnings and the usual big retailers – if the big giants have spent millions in research is setting up a branch here, then there must be something right about the area
4. More importantly, a proposed new University of Sunshine Coast (USC) campus will be built at the existing Petrie Old Paper Mill site! Estimated completion will be 2020 attracting tens and thousands of university students. At the same time surrounding area around USC will also be transformed into complete new precinct called “The Mill at Moreton Bay”! – again capitalize on private/public infrastructure 🙂
(Here is a link to the 7 news about the 300 million university proposal)

I dare say that’s some significant infrastructure/area spend around the area to ignore!

So based on these reasons, I’ve started searching for IPs which again fits my usual criteria:
1. Good Yield – Gross yield of 6.5% or more
2. Excellent Location – close to good school/public transport/major shopping centre/infrastructure
3. Contains scope for value add – such as cosmetic renovation, granny flat, build out downstairs
4. Has subdivision or development potential

As a Sydneysider I know how precious it is to have a house that’s within walking distance to train station. So while searching around Kallangur I’ve put particular focus on houses around the train station in order to capitalize on the new train line.

Obviously Brisbane is quite different to Sydney today and the Brisbanites today may not have such demand for public transport. But I like to keep my view long term – imagine 20 years later when QLD population grows, wouldn’t it be nice to have a property that is close enough to the train station like Sydney when roads are getting clogged and people found commuting to City is actually faster via train?

Coming to this conclusion, my search criteria for this property are therefore:
1. Near train station or shopping centre
2. Contains scope for value add

Then it’s not too difficult to narrow down to those properties currently on the market which are:
1. Near either Kallangur, Petrie or Murrumba Downs station
2. Potential highset, or lowset with potential additions such as granny flat

And then it comes down to seeing enough listing properties online and calculating potential yield that the IP can bring in order for me to hold it long term 🙂

Most people ask me about how to go about finding an Investment Property – well, now you’ve seen it. It’s really not rocket science, just need patience and perseverance 🙂

Next time we’ll cover more details about property number 5 which I bought in Murrumba Downs, a neighbouring suburb of Kallangur. Until then, if you have any questions about any of the above content feel free to leave a comment or contact us directly!

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